South Dakota Lawmakers Struggle To Put a Price On Hemp

Legislators postponed a vote to authorize industrial hemp production in the state following wide estimates of how much the program would cost.

March 7, 2020

South Dakota’s hemp dispute isn’t over yet.

Gov. Kristi Noem (R) and lawmakers proposed significantly different cost estimates for legalizing industrial hemp. House Bill 1008 was scheduled for final legislative approval in the Senate on March 5, but it was postponed until March 9.

The Senate’s Joint Committee on Appropriations heard from three governor departments heads that the start-up cost will be nearly $1.9 million and the ongoing annual expense would be $1.6 million. The governor’s office said legalization of hemp would require 15 full-time staff, new testing equipment, four police dogs and expanded drug storage space for the state’s drug lab and Highway Patrol.

Lawmakers also received a Legislative Research Council estimate that it would cost about $80,000 for start-up and $165,000 for ongoing annual expenses. The estimate suggested that hemp, which could be treated like other agriculture crops, would only require the Department of Agriculture to hire one person to oversee and part-time testing by law enforcement. Some of those expenses could be covered by the fees and licenses from hemp farmers and processors.

Rep. Oren Lesmeister (D) and a proponent of hemp, said the governor’s office inflated the numbers based on a false presumption that drug cases would “sky-rocket” as a result of an industrial hemp program. He charged that the governor is using the high estimates as a tactic to thwart the bill.

“It is how she wants to kill hemp,” he told The Boston Globe.

Noem vetoed a similar bill last year but in January said she would sign legislation this year if it met her “four guardrails”: enforcement, regulation, transportation and funding.  

House Republican leader Lee Qualm, and the bill’s prime sponsor, told Keloland Media Group that even if the bill passed, farmers probably likely wouldn’t plant much hemp because rules likely wouldn’t be in place until June, leaving farmers a short window for planting.

South Dakota voters will be voting on two issues in November on whether to legalize medical marijuana and recreational marijuana.